Air Canada has been undergoing plans to start a separate low-cost airline service under the ownership of Air Canada but with a different name. They are planning to reduce costs by increasing the number of seats in their carriers by 20% as well as lower employee wages and more flexibility in their work rules.

Oftentimes, companies will name brands under their ownership separately in order to differentiate them from one another. It is incredibly difficult to reposition a brand so once consumers have formed their own brand associations with Air Canada, it would be hard for them to change their opinions. Therefore, by using a completely different name for their new airline, consumers will base their opinions on their first impressions and hopefully associate the new airline as being low-cost and not from their previous connections with the Air Canada image.

Apart from the launch of their new low-cost airline, Air Canada is also considering adopting a premium economy class which would provide yet another alternative for their consumers. These expansion decisions by Air Canada have allowed them to position themselves in different segments of the market and to appeal to the tastes of different consumers, hoping that this method will help increase their profits.